Italy Fines Amazon Record $1.3 Billion for Abuse of Market Dominance

By Reuters
Reuters
Reuters
December 9, 2021 Updated: December 9, 2021

MILAN—Italy’s antitrust watchdog announced on Dec. 9 that it has fined Amazon 1.13 billion euros ($1.28 billion) for the company’s alleged abuse of market dominance, in one of the largest penalties imposed on a U.S. tech giant in Europe.

Amazon said it “strongly disagreed” with the Italian regulator’s decision and that it would file an appeal.

Global regulatory scrutiny of tech giants has been increasing after a string of scandals over privacy and misinformation, as well as complaints from some businesses that they abuse their market power. Google, Facebook, Apple, and Microsoft have drawn heightened scrutiny in Europe.

The Italian Competition Authority, the antitrust watchdog that levied the fine, said in a statement that Amazon had leveraged its dominant position in the Italian market for intermediation services on marketplaces in order to favor the adoption of its own logistics service— Fulfilment by Amazon (FBA)—by sellers active on Amazon.it. The authority stated that Amazon has tied FBA access to a set of exclusive benefits, including the Prime label, that help increase visibility and boost sales on Amazon.it.

“Amazon prevents third-party sellers from associating the Prime label with offers not managed with FBA,” the authority stated.

The Prime label makes it easier to sell to the more than 7 million high-spending members of Amazon’s loyalty program.

The antitrust authority also stated that it would impose corrective steps that will be subject to review by a monitoring trustee.

Amazon stated that FBA “is a completely optional service” and that the majority of third-party sellers on Amazon don’t use it.

“When sellers choose FBA, they do so because it is efficient, convenient, and competitive in terms of price,” the company said in a statement. “The proposed fine and remedies are unjustified and disproportionate.”

The EU Commission said it cooperated closely with the authority on the case, within the framework of the European Competition Network, to ensure consistency with its own two ongoing investigations into Amazon’s business practices.

The first European Competition Network case was opened in July 2019 to assess whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace was in breach of EU competition rules. The second case, in late 2020, focused on the possible preferential treatment of Amazon’s own retail offers and those of marketplace sellers that use Amazon’s logistics and delivery services.

“This investigation complements today’s decision of the Italian Competition Authority, which addresses Amazon’s conduct in the Italian logistics markets,” the commission stated on Dec. 9.

By Elvira Pollina and Maria Pia Quaglia

Reuters